Probe Rs 17k cr excess crop loans: Punjab

Ruchika M Khanna

Tribune News Service

Chandigarh, June 27

The Punjab Government has asked the Union Ministry of Finance to probe how private banks advanced excess agricultural loans (crop loans) worth Rs 17,600 crore to state farmers. This loan amount is more than the actual value of crops sold each year.

While 30 per cent of marginal farmers (1.46 lakh of 5.71 lakh) have received Rs 7,097.46 crore — each getting a loan of over Rs 2 lakh, the total crop loan given to marginal farmers is Rs 9,845.09 crore.

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While 1.11 lakh farmers got loans ranging between Rs 2 lakh and Rs 5 lakh, totalling Rs 3,189 crore, 35,877 farmers got loans over Rs 5 lakh.

The rules say the maximum crop loan —  the working capital limit for a crop season — that a farmer can get is Rs 40,000 per acre. By this standard, the maximum loan that a marginal farmer, who owns under 2.5 acres, can get is Rs 1 lakh, while the maximum crop loan that a small farmer, who owns 2.5 to 5 acres, can receive is Rs 1.80 lakh.

As many as 2.94 lakh farmers have got crop loans between Rs 2 lakh and Rs 5 lakh each, while 70,893 farmers have got crop loans of over Rs 5 lakh. This has raised suspicion on how money has been lent to farmers without enough landholding.

Most of these advances have been given by private banks, which in a bid to meet the priority sector lending norms have allegedly flouted rules and increased the loan extended to farmers, otherwise ineligible for such high loans.

As much as 18 per cent of the total lending  has to be done in the agriculture sector as advances to farmers. Since crop loans attract 3 per cent interest subvention, it is possible that these banks are pocketing the interest subvention and giving retail/personal loans in name of crop loans.

Banks, rather than bringing more marginal farmers into their fold, have allegedly been increasing the limits of the existing farmer loanees.

Chief Principal Secretary to the CM Suresh Kumar said it was while analysing data for the debt waiver-relief scheme that they realised how three leading private banks extended crop loans (given for one crop cycle) worth over Rs 10,000 crore each to farmers.

“We buy crop worth Rs 42,000 crore in Punjab every year, so the crop loan cannot exceed this amount. But the total crop loan, as revealed by the state-level bankers’ committee, is Rs 59,620 crore — a mismatch of Rs 17,620 crore.”